The Cost of Diabetic Foot Ulcers

By Phil Stevens, MEd, CPO, FAAOP

The annual cost of diabetes is tremendously expensive; according to the American Diabetes Association, it was $245 billion in 2012.1 While nearly $70 billion of this figure was associated with reduced workforce productivity, the remaining $176 billion occurred as excess healthcare expenditures.1 These costs can, in turn, be divided into those associated with treatment of the disease itself, those associated with chronic complications of diabetes, and those native to O&P professional interests: foot ulcers.1

Foot ulcers are common among the 22.3 million Americans with diabetes, annually affecting as many as 6 percent of this population and eventually affecting as many as 25 percent of these individuals during their lifetimes.2 Treatments are variable, ranging from the conventional techniques of debridement and offloading to the more elaborate approaches of hyperbaric oxygen therapy and bioengineered skin substitutes. Concurrent with the often extended healing times associated with such ulcerations, there is an increased risk for infections and other comorbid sequelae. As a result, foot ulcers are a major cause of hospitalizations and additional healthcare expenditures in this population and have been linked with a three-year cumulative mortality rate of 28 percent.2 This article considers recently published data related to the cumulative costs associated with the medical management of diabetic foot ulcers (DFUs).


Determining the cumulative costs associated with DFUs is complicated by the fact that those who sustain them are more likely to carry the burdens of additional comorbid conditions like congestive heart failure and renal dassociated with users and nonusers of prosthetic and orthotic interventions ("The Dobson DaVanzo Report: What it Says and Why it Matters," The O&P EDGE, February 2014).

The authors began with 231,438 Medicare beneficiaries with diabetes between January 1999 and December 2010. Of these, roughly 30,000 (13 percent) had experienced a DFU, leaving 200,000 Medicare beneficiaries with diabetes from which controls couldisease. To fairly assess the cost differential solely attributable to the ulcer requires a carefully matched control group with similar levels of medical complications and their associated costs. A randomized controlled trial, highly regarded in pharmaceutical studies, is not possible as individuals cannot ethically be assigned to develop a foot ulcer. Instead, the authors of the most recent analysis used propensity score matching to create a matched control group.2 This is the same technique used in the 2013 retrospective report by Dobson DaVanzo & Associates, Vienna, Virginia, on the cumulative medical costs be drawn. All patients were assigned an index date. For those with a foot ulcer, this was the date of the foot ulcer claim. For the remaining beneficiaries, this was the date of a random medical claim during the study period.

Control subjects were matched to individuals with a DFU on a one-to-one basis using gender, the year of index date, pre-index healthcare costs, and the likelihood of developing a foot ulcer using propensity scoring. These propensity scores were based on age as well as comorbidities known to affect the healing rates of a foot ulcer (i.e., infections and peripheral vascular disease), conditions that affect healthcare costs (i.e., congestive heart failure and renal disease), and medical resource use (i.e., inpatient days and emergency room visits).


Prior to the elaborate matching exercise, the characteristics of the DFU cohort differed from the control group in "nearly every dimension examined during the 12-month pre-index period."2 Patients with DFUs were older, with nearly twice the rates of peripheral vascular disease, infections, renal disease, and congestive heart failure. They had spent more days in the hospital, experienced more visits to the emergency room, and attended more outpatient physician office visits. In short, these were generally sicker people. As a result, prior to matching, the DFU cohort had pre-index healthcare costs that were twice those of the control population ($22,147 versus $11,022 per person).2

Suitable matches were identified for 27,878 of the 30,000 Medicare beneficiaries with DFUs. After reducing both the DFU group and the control group to those individuals with direct matches, the patient characteristics between the two cohorts were more similar. Both groups experienced comparable healthcare costs during the 12 months prior to the index date (reported at just under $18,000). Similarities were further confirmed with regard to age, gender, prevalence rates of key comorbidities, and utilization of inpatient settings, emergency rooms, and outpatient office visits.2


With an appropriate control group established to isolate the effects of foot ulcers on both healthcare utilization and costs, the authors examined the events of the 12 months post-index. Despite the pre-index similarities between the two groups, there were dramatic differences in the healthcare utilizations of the DFU group in the first year after their ulcers. They spent more than twice as much time in the hospital, utilized almost twice as many days of home healthcare, spent more time in the emergency room, and experienced more outpatient physician office visits.2 Advanced wound healing strategies were uncommon, with only 1.2 percent of the DFU group undergoing hyperbaric oxygen treatments and 1.8 percent receiving bioengineered skin substitutes.2

Given the increased utilization observed in the DFU group, it is not surprising to note substantial increases in overall healthcare costs. The average one-year-per-patient medical costs for those in the DFU group were just over $28,000, almost $12,000 more than the $16,320 consumed, on average, by those in the control group.2 The contributions of the various healthcare settings to this discrepancy were shared fairly evenly. Differences in average emergency room costs were substantial across both groups ($5,346 compared to $2,924) as were average home healthcare costs ($4,390 compared to $2,283). Average inpatient expenses also contributed to the discrepancy in expenses between the two groups ($4,719 compared to $2,294). Outpatient physician office visits and other utilization costs explained the remainder of the differential.


Average episode costs of diabetic ulcers by Wagner classification.

Medical costs were further defined as DFU related if they were associated with a diagnosis for an ulcer or ulcer-related infection (such as cellulitis, osteomyelitis, or gangrene) or if the procedure code related to ulcer treatment (such as debridement, drainage, amputation, hyperbaric oxygen treatments, or skin substitutes). The average cumulative costs of these DFU-related expenses came to $5,285. Given the total average healthcare spending discrepancy of $11,710, on average, well over half of the discrepancies in healthcare expenditures experienced by beneficiaries with DFUs in the first year after their ulcers were not directly related to the medical management of the ulcers themselves ($6,425 on average).


This was the first study of its kind. It comprehensively extracted the differences in the healthcare experiences and costs of those Medicare beneficiaries with diabetes who sustained a DFU and compared them against the healthcare utilizations of closely matched peers who did not sustain an ulcer. The findings were significant, reporting an average per-patient increase of almost $12,000, over half of which was not directly associated with the treatment of the ulcer itself. However, even these striking figures fail to tell the entire story.

Prior to the matching exercise, there were 29,681 patients in the DFU cohort with an average pre-index healthcare cost of $22,147 per patient. After the matching exercise, there were only 27,878 patients in the DFU group, with a reduced per-patient pre-index healthcare cost of $17,744. This implies that the 1,800 patients with DFUs who could not be matched had such high pre-index healthcare costs that their removal reduced the per-patient healthcare costs of this group by $4,400 per patient even though they represented only 6 percent of the original sample. Stated more directly, the patients in the DFU cohort with the highest pre-index healthcare costs were excluded from the study because they could not be matched within the control group. Had these severely sick and costly patients remained in the DFU sample, the cost differential would have leapt from $11,710 to $18,756.2 Thus, the 12-month healthcare costs associated with a DFU are even higher when the most compromised beneficiaries with the highest healthcare utilization histories are included.

Similarly, the healthiest Medicare beneficiaries of the control group were also unable to be matched within the DFU group. As a result, the average pre-index healthcare costs of the control group rose from $11,022 to $17,744 with their exclusion.2 Thus, the reported per-patient annual healthcare expenditures of $16,000 to $17,000 among Medicare beneficiaries without foot ulcers is inflated by the exclusion of relatively healthier patients. It represents the average per-patient healthcare costs of those beneficiaries who did not experience a foot ulcer but who had similar presentations (age, medical history, and comorbid conditions) and were at similar risk to those who did.

Additionally, the study design limited its evaluation to healthcare costs experienced in the first 12 months after the initial observance of the foot ulcer. This parameter fails to account for the reality that many patients remain unhealed after 12 months of wound management, and many experience subsequent re-ulceration after initial healing.2 The financial implications of a foot ulcer are rarely fully realized in the year after the ulcer is first observed. An earlier retrospective study by a different research team reinforces this conclusion. They observe that the relative costs of care for patients with diabetes who have lower-limb ulcers were 1.5 to 2.4 times higher than for those with diabetes who did not have an ulcer in the year prior to the ulcer incident recorded for this study (depending upon the age range of the patient). This disparity increased as much as 5.4 times in the year after the ulcer.3 This relative differential was sustained in the second year after the ulceration, with the average discrepancy in cost of care remaining as much as 2.8 times higher than those with no ulcers. Further, cost differentials during the second year exceeded those observed in the year prior to the ulcer across all age groups.3

However, even within these limitations, all of which would appear to lower reported costs associated with diabetic ulceration, the findings of the study were summarized by the authors as follows: "[T]he excess healthcare costs of DFU are approximately twice that attributable to treatment of diabetes itself, and the presence of DFU approximately triples the excess cost differential versus a population of patients without diabetes."2


Foot ulcers represent a substantial cost burden among Medicare beneficiaries with diabetes, with Rice et al. suggesting a one-year cost of just over $9 billion. Understanding the true cost of a foot ulcer is a challenging enterprise as those individuals at the greatest risk for ulceration are generally sicker individuals with greater healthcare utilization costs prior to the development of the ulcer itself. Once these individuals are identified, it is important to note that the direct costs associated with the treatment of the ulcer ultimately represented less than half of the additional healthcare expenditures experienced by these individuals. Additional utilization of hospitals, emergency rooms, home health services, and outpatient physicians' visits appears to further contribute to increased healthcare costs. Additionally, both the direct and indirect costs associated with foot ulceration appear to extend beyond the first year, which increases the cumulative healthcare burden. Given the extreme costs associated with treating this condition, screening and prevention are more justifiably pursued, both for patients' well-being and the containment of their associated medical bills.

Phil Stevens, MEd, CPO, FAAOP, is in clinical practice with Hanger Clinic, Salt Lake City. He can be reached at .


  1. American Diabetes Association. 2013. Economic costs of diabetes in the U.S. in 2012. Diabetes Care 36 (4):1033-46.
  2. Rice, J. B., U. Desai, and A. K. Cumming et al. 2014. Burden of diabetic foot ulcers for Medicare and private insurers. Diabetes Care 37 (3):651-8.
  3. Ramsey, S. D., K. Newton, and D. Blough et al. 1999. Incident, outcomes, and cost of foot ulcers in patients with diabetes. Diabetes Care 22 (3):382-7.
  4. Holzer, S. E., A. Camerota, and L. Martens et al. 1998. Cost and duration of care for lower extremity ulcers in patients with diabetes. Clinical Therapeutics 20 (1):169-81.